Sales volume definition
/What is Sales Volume?
Sales volume is the number of units sold within a reporting period . This figure is monitored by investors to see if a business is expanding or contracting. Within a business, sales volume may be monitored at the level of the product, product line , customer , subsidiary , or sales region for the following reasons:
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To track sales performance by the sales department
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To adjust the investments targeted at specific products, product lines, customers, or sales regions
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To adjust marketing activities to generate more sales volume
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To spot changes in sales trends that might trigger changes in the amount of finished goods inventory kept on hand
A business may also monitor its break even sales volume, which is the number of units it must sell in order to earn a profit of zero. The concept is useful when sales are contracting, so that management can determine when it should implement cost reductions. This can be a difficult concept to employ when there are many different products, and especially when each product has a different contribution margin .
The sales volume concept can also be applied to services. For example, the sales volume of a consulting firm may be considered the total number of hours billed in a month.